You could choose how to manage personal finances by writing it manually in personal notebook, but you will soon realize that it would not be sufficient if you want to do an analysis of your personal expenses and make a quite complex personal financial statement. At that moment, you will need personal accounting software.
There are many options for personal accounting software available on the market such as Quicken, YNAB, and many more. Paid software usually has more complete features and good support.
If you are just an ordinary user with no accounting knowledge at all, or you just want to try the software for free before purchasing commercial software, whatever your reason, you have several options for free software out there.
Many options of free software will be helpful for you in determining the software that suits your needs, but on the other hand it can be confusing you how to choose the software which appropriate for you. I have tips to help you in choosing free software for you. Even so, you can apply these tips in selecting paid software as well.
1. Do not require accounting knowledge.
The user is the home user who has a very diverse educational background. Thus, software should be understood to everyone, and the software should not use the terms that only understood by accountants such as the balance sheet, depreciation, amortization, accounts payable, etc. The user should need knowledge only on the simple arithmetic calculation.
Budget concept is very simple but very useful in controlling. You compare actual data with its budget then you will get early warning when you over budget. The software should have features to facilitate in performing budget control.
3. Scheduled Transaction
Expenditures of a household must have routine transactions to pay every month such as electricity, telephone, internet, etc. Delay in paying these regular bills will bring very inconvenient impact. In this case, the software should be able to take a part.
Your Revenues and expenditures for a month or a year could be presented in the table or charts to help you in analyse your transaction activity. This feature is mandatory presence.
5. Help / Manual
In the paid software, maybe this is not a problem but not on free software. Good free software should have a help / manual clearly, and it can be understand by the user easily.
Your financial transaction is a very personal and very confidential. The software must maintain that confidentiality. Password feature will maintain the confidentiality of your personal data transaction.
7. Lifetime Planner
Lifetime Planner is the tool to make the plan of your retirement. Actually, this feature requires a little knowledge in finance such as the rate of inflation. Not all free accounting software has this feature. However, this feature is very useful for you, believe me. This feature is not mandatory but recommended feature.
Many free accounting software meet with those criteria such as Ace Money (Lite version), Buddi, HomeBank, and Microsoft Money Plus Sunset Deluxe.